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Naming an arena not in PPL customers' best interests

Published March 02. 2013 09:02AM

Dear Editor:

The PPL Board of Directors has magnanimously decided to impose the cost of the naming rights to the PPL Center on its customers and shareholders. Where else would the revenues be derived - reportedly $20 million for 10 years, but PPL will not confirm this figure to fund this "naming opportunity?"

Boards of Directors have a fiduciary responsibility to shareholders (and in a public utility context where responsibilities lie to others such as customers as well). Can the Board of Directors articulate how this expenditure provides better economic performance or better economic opportunities for PPL, and hence greater shareholder value? And if not, allow the shareholders to offer a motion and the annual shareholders' meeting for the cost of naming the arena, as decided upon by the directors of PPL, be borne by the directors (unless of course the action occurs as a result of a majority vote of shareholders).

And if the anticipated response will be that the $20 million expenditure is for "advertising," is there no more cost-effective way to use its advertising budget than to name an arena?

And why would an organization claiming to be charitable and tax-exempt such as Lehigh Valley Health Network "advertise" at the arena by using dollars generated from those who pay health-care insurance premiums. Does the use of a utility company's dollars and/or a "non-profit" hospital's revenues for advertising purposes make sense? Please explain how such elaborate advertising makes sense to the delivery of medical services and the delivery of utility services. Advertising may be fully appropriate for Wal-Mart and Coca-Colabut for a utility or a non-profit hospital?

Charles Stopp, J.D.


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